What it measures
FCNR(B) is a term deposit that a Non-Resident Indian can hold with an Indian bank in a foreign currency, typically US dollars, rather than rupees. This shields the depositor from rupee depreciation. The Reserve Bank of India has run schemes, including a swap facility offering banks a concessional rate, that let banks pull in dollar funding quickly when it wants to support reserves or the currency.
It is a type of deposit, not a ratio. It is measured in dollars or the rupee equivalent.
How to read it
Large FCNR(B) inflows lift headline deposit and loan growth, because the deposits, and the loans a bank books against them through international branches, are counted in the totals. Read a quarter with a large inflow both with and without it. Many banks print the growth excluding FCNR(B) alongside the headline.
Where it misleads
These deposits carry a much lower share of cheap current and savings money than the bank's domestic franchise, so a big inflow can lower the CASA Ratio and pressure NIM. The loans booked against them earn thin margins. A headline growth rate that includes them overstates growth in the underlying domestic business.
Worked example
ICICI Bank's Q2 FY2027 post shows the gap. Headline loan growth was 30.0% and deposit growth 27.1%. Excluding FCNR(B) deposits and the loans against them, the bank's own figures are 24.1% for loans and 17.0% for deposits. Net interest margin fell to 4.18% from 4.36% last quarter and 4.30% a year earlier. The average CASA ratio fell to 35.8%, from 39.2% a year earlier and 38.1% last quarter. The press release links the fall in the ratio to FCNR(B) inflows. The bank said on its call that it had mobilised gross FCNR(B) deposits of about 18 billion USD under the RBI swap facility.
Where to find it
MD&A, investor presentation (deposit and loan growth disclosures), and the notes to the financial statements on deposits.
See also: CASA Ratio, NIM, Loan-to-Deposit Ratio.